Buy. Sell. Lease. Renovate. Find out the latest in San Diego commercial real estate in this annual edition. Highlights include a roundtable discussion, a CEO profile and industry news on what's currently on and off the market.

The new, 26-building Carroll Canyon Business Park in the Miramar area of San Diego has recently been completed. The industrial buildings range in size from 5,560 square feet to 12,515 square feet. Each building is divisible to accommodate either one or two tenants. A two-acre land parcel and a 2.6-acre land parcel are also available for sale or build-to-suit.

Cost segregation is an IRS-approved method of re-classifying components and improvements of a commercial building from real to personal property. This process allows the assets to be depreciated on a five-, seven- or 15-year schedule instead of the traditional 27.5- or 39-year depreciation schedule of real property. Thus, your current taxable income will be greatly reduced and your cash flow will increase, and even better, its retroactive back to 1986. Found cash that belongs to you!

Mission Valley is the most centrally located suburban office market in San Diego and continues to attract a large and expanding corporate tenant base. In the past several years, Mission Valley has proven to be a stable and growing market, demonstrated by consistently low vacancy and rising rental rates. Given the diverse tenant base, low historical vacancy, consistent space absorption and rising rental rates, the Mission Valley office market will continue to perform well as the third quarter approaches.

Discovery Bank recently did an informal survey of real estate managers, multifamily housing managers, site managers, property managers and staff members of property management companies. The result has given the bank insight into and a better understanding of the services the line staff find relevant in assisting them with their day-to-day activities.

Increasingly, commercial property owners and managers are outsourcing the ongoing maintenance of their buildings to full-service facilities maintenance companies. Comprised of construction professionals and licensed tradesmen, these companies have the experience and capabilities to tackle virtually any job or project -- routine and ongoing maintenance, emergency service programs and preventive building inspections.

Editor's note: The hotel-condo concept is already afoot in San Diego. An early entry is The Diegan at the northern end of the Gaslamp Quarter on Fifth Avenue being developed in conjunction with the House of Blues. It includes 161 studio and one-bedroom suites and 24 penthouse suites. In May 2005, the penthouses went up for ownership and all were sold. The studio and one-bedroom suites remaining ranged from $400,000 to $600,000. In May 2006, the Hard Rock Hotel San Diego announced the condo-hotel sold out the first phase on its 420-suite property, selling 300 suites in just one day. Hard Rock Hotel San Diego is currently under construction and is scheduled to open in summer 2007. The hotel will include 243 studio suites, 159 one-bedroom suites and 18 Rock Star suites.

A debate over commercial space and sublease space and how it is being calculated appears to be heating up. The topic came to the fore during a roundtable discussion hosted by The Daily Transcript on Sept. 14.

Construction of the new, $40 million Pinnacle Executive Centre in Rancho Bernardo is on track for completion in March 2007. "We will be moving tenants into the building on March 1, 2007," predicts Chris Coseo, the project developer. The five-story, 108,844-square-foot, Class A office building is located at 10920 Via Frontera in San Diego.

Nowadays when someone mentions a "green" building, they're most likely not talking about the color. As the environmental impact of buildings becomes more apparent, these Earth-friendly buildings continue to gain momentum.

Construction of Civic Center Plaza, a new $12 million, 60,000-square-foot retail center adjacent to the San Marcos Civic Center, is under way. The 5.92-acre, four-building development is located at the northeast quadrant of Highway 78 and Twin Oaks Valley Road in San Marcos. The project is sited next to the planned Sprinter light rail station, near the new Twin Oaks Valley Road expansion, which extends south into the master-planned community of San Elijo Hills.

A beautiful green lawn in every season, with no watering, no mowing, no fertilizing, no bugs -- this has been the promise of the artificial turf industry for the last 40 years. While historically considered inferior to natural grass, advances in product quality and an increasing emphasis on water conservation have made artificial turf an option that deserves serious consideration in many landscape applications.

Burnham Real Estate reports that downtown San Diego retail vacancy has dropped more than a full percentage point during the first six months of the year, currently standing at 6.6 percent following 39,428 square feet of year-to-date net absorption.

It's A Grind -- the fastest growing coffee franchise in the United States -- has signed a 10-year lease for 1,420 square feet of ground-floor retail space at DiamondView Tower in downtown San Diego. Additional tenants are expected to sign leases and be announced in the coming weeks.

As investors continue to purchase San Diego's core office buildings and small businesses are increasingly purchasing office condos for their office space needs, the San Diego office market has become a hot commodity.

Standing proudly amidst a jungle of wires, concrete and twisted metal, shouting over the roaring buzz of power tools and the blaring tunes of a local radio station, hotel owner Judi Winslow inserts a keycard into a fine Asian hardwood door and turns the handle.

Profiles

When comparing the mid-1970s to today, San Diego's commercial real estate market has undergone much expansion and alteration. However, some things have remained the same, such as Marten Barry's presence in an industry where change is constant.

This annual report highlights the hot spots for commercial space around the county, exploring what's available on the market and what markets are topped out. We'll also provide expert insight on how to improve commercial space for tenants and discuss commercial space trends.

This special report highlights the hot commercial real estate spots around the county. We'll also offer insight on things to consider when searching for commercial space and when improving your space to appeal to new tenants.